Retailers Look Forward to Big Shopping Weekend

LANSING, MI--(Marketwired - December 16, 2015) - Michigan retailers are looking forward to this big holiday shopping weekend -- the final one before Christmas.

"The weekend before Christmas is traditionally one of the two biggest of the season and the year," said MRA President and CEO James P. Hallan. "Combine that with the fact 90 percent of shoppers say they still have purchases to make, and it points to an exciting weekend."

A survey released Tuesday by the National Retail Federation found that, on average, shoppers have completed 53.5 percent of their lists. Only 10 percent say they are finished.

Michigan retailers went into the season with the highest expectations since 2012. Two of every three said they expect to increase sales over last year's holiday season. The average projected change from last year was a plus 2 percent.

November retail sales in Michigan were positive but lighter than expected, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

Hallan said he expects retailers to hit their projections by the end of December. The weekend starting the day after Christmas also will be big for shopping because of the redemption of gift cards, merchandise exchanges and clearance sales.

He said the warm weather is helping more people get out and shop, even though it has cut into sales of coats, boots and other cold and snow-related merchandise.

For November, the Michigan Retail Index survey showed 39 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 16 percent reported no change. The results create a seasonally adjusted performance index of 50.2, down from 54.1 in October. A year ago November the performance index stood at 48.1.

The 100-point index gauges the performance of the state's overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve Bank of Chicago's Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 42 percent of retailers expect sales during December-February to increase over the same period last year, while 34 percent project a decrease and 24 percent no change. That puts the seasonally adjusted outlook index at 62.6, down from 66.6 in October. A year ago November the outlook index stood at 64.1.

Note:
William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

November Performance Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago(numbers in parentheses indicate October results)

% Increased

% Decreased

% No Change

Index*

Responses

Sales

39 (41)

45 (34)

16 (25)

50.2 (54.1)

74 (65)

Inventory

36 (41)

27 (24)

37 (35)

51.7 (55.6)

74 (63)

Prices

10 (11)

9 (5)

81 (84)

52.0 (54.3)

74 (65)

Promotions

42 (28)

7 (0)

51 (72)

66.2 (64.1)

73 (65)

Hiring

7 (15)

11 (6)

82 (79)

50.1 (55.0)

74 (65)

Outlook for Next 3 MonthsRetailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago(numbers in parentheses indicate October results)

% Increased

% Decreased

% No Change

Index*

Responses

Sales

42 (48

)

34 (20

)

24 (32

)

62.6 (66.6

)

70 (65

)

Inventory

12 (25

)

45 (42

)

43 (33

)

40.7 (47.8

)

73 (64

)

Prices

10 (12

)

9 (8

)

81 (80

)

51.2 (52.3

)

73 (65

)

Promotions

38 (52

)

4 (2

)

58 (46

)

73.0 (73.4

)

73 (65

)

Hiring

10 (14

)

11 (12

)

79 (74

)

54.7 (51.4

)

73 (65

)

November Sales Performance & Outlook for Next 3 Months, by Region(the first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months)

% Increased

% Decreased

% No Change

North

31 (19

)

56 (69

)

13 (12

)

West

32 (50

)

47 (17

)

21 (33

)

Central

50 (38

)

50 (62

)

0 (0

)

East

40 (20

)

60 (40

)

0 (40

)

Southeast

45 (53

)

32 (14

)

23 (33

)

Question of the MonthCurrently, what is your most significant cost driver?

Worker

Product

Rent (%)

Capital

Other (%)

Pay (%)

Prices (%)

Equipment (%)

40

25

9

1

25

*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.